We all know what happens to the big bad wolf in that story. I don’t want to be the wolf.’ Essilor Europe president Bernhard Nuesser was in philosophical mood at a specially arranged press briefing to discuss the company’s expansion into online retail in London last week.
‘For over 150 years, Essilor has been a partner of independent opticians, we do not want to do anything to jeopardise that,’ said Nuesser, who had flown in from Switzerland where he had addressed 200 opticians on the same topic.
Essilor has a problem that it never envisaged. The optician businesses it supplies have become increasingly uncomfortable with its expansion in a sector that many consider to be the very competition that threatens their livelihoods and has done so for well over a decade.
The wolf Nuesser was referring to was the caricature used in a video created by and hosted on the Axiom Advance website. Although the site did not name Essilor directly, it listed a number of online optical sites that had been acquired by the company. It was not a difficult puzzle to piece together.
The press briefing was called because there had been significant media interest in the firm’s online activity, primarily from Optician. It was a chance for the company to open up about its plans and offer independents some reassurance that the primary intention behind online expansion was not to encroach on their business. While this reassurance was not offered directly, reasons behind the move into online retail were explained.
Growing pains
Nuesser (pictured left) said Essilor has long held expansion as one of its core strategies. From growth in America in 1990s through the purchase of 120 ophthalmic labs, to forming partnerships in fast emerging markets in the noughties.
Three years ago Essilor implemented a new expansion strategy, which included three key strands: the acquisition of Transitions from PPG, increased activity in the sun lens sector and growth within the online optical retail sector.
‘We wanted to look at how the industry is dealing with the fact that the digital space has changed purchasing behaviour,’ said Nuesser.
At present, online retail accounts for €5bn of a €90bn worldwide optical market. North America, Europe and China lead the way, with Europe and America accounting for €2bn each and China the remaining €1bn. In Europe, Nuesser said its Scandinavia, Germany and the UK who are the most advanced in terms of online sales volume.
So why would a lens manufacturer look at the online retail space for growth? ‘We looked at it because we feel the industry needs to take control of it, take advantage of it and shape it before others do. By taking control of it, we can create an eco-system that benefits us and our partners – which in this case includes independent opticians,’ said Nuesser.
This altruistic approach makes some sense. In all likelihood, Amazon, which at the moment only sells a limited scope of optical products, will work out a way of offering prescription spectacles. And as Nuesser pointed out, almost every customer journey today, in some way, shape or form, involves the internet. If not for the transaction, then for the research.
But the scope of Essilor’s online expansion goes beyond that of only ecommerce, said Nuesser, who added he was actually excited about Essilor’s digital endeavours and how it will help independents. An information based website, allaboutvision.com, has been purchased to help deliver on Essilor’s strategy of helping people see better. In this time of search engine rankings, Essilor plans to have the site at the top of results when optics-related words are searched. Should the user visit the site, which is quite likely given the 50 million unique visitors every year, then they will receive non-commercialised information. Nuesser said this would create value for Essilor and opportunities for its partners – which included. A similar site named myonline optical.com, and a UK version of it, would also help drive online traffic to opticians, said Nuesser.
In Scandinavia, the company is also trialling a omni-channel retailing experience with its online brand Lensway, something that for optics, because of the complexity of the testing process, Nuesser said could work well in future. He also cited the omni-channel model of German site brillen.de, which has a large number of optician store partners that are paid a set fee for the eye test as part of the overall online transaction, as an example of a model that did not benefit the optician. Business owners can take some solace in the fact that the company is looking at online models that do not hurt their profit and loss accounts.
The complexity may well hold a glimmer of hope for independent opticians, but when it came to reassurance about the future, Nuesser said Essilor could make no promises: ‘The company is testing many different models, so cannot rule anything in or out. The online optical market is going to grow from its current 5%, but it’s not going to take over the market because buying glasses is a complicated, technical purchasing process.’ Bricks and mortar Glasses Direct stores would be an incendiary prospect.
Prescription complexity is another factor that Essilor will have to wrangle with. At present, its halo products like the S-Series and Varilux are not found online. Essilor said the dispensing measurements are something better left to the expert professionals in practices. Optician asked if this was so, then why could the company not remove bifocals and progressive lenses from its websites, but Nuesser said this would impact consumer choice.
A backlash
The reaction from within the industry has been mixed. Axiom Advance has clearly sought to seek like-minded individuals who are unhappy with the move into online, but some business owners, such as Michael Carr, owner of Stanley H Field Opticians in Alfreton, just wished for more transparency from Essilor, so he could make business decisions a little easier.
The ophthalmic lens manufacturing industry has, according to Nuesser, seized the opportunity to highlight its position on the subject. ‘In Germany, Carl Zeiss placed a double page advert which said “we believe that lens suppliers should never sell online.”
‘This is fine, but I have to ask what Carl Zeiss is doing to shape the market. If everyone keeps doing the same as they have done before, then nothing will change and independent opticians will end up with less market share and a much higher average age of customer.
‘Following the purchase of Coastal just over two years ago, the company received a major backlash from independent optical businesses,’ said Nuesser. ‘Now, they are coming to us and asking Essilor for an omni-channel model.’
A spokesperson for Carl Zeiss Vision in Germany said: ‘In Germany, we published an advertisement and website discussing digitalisation and what it means for the relationships between manufacturers, ECPs and optical retailers. It will also be the company’s theme for our presence at Opti Munich in January.
‘The question of whether lens manufacturers will sell directly to consumers via online or brick and mortar stores, is widely discussed in Germany. As one of the world’s leading lens manufacturers, we believe our customers can expect a clear answer on this question. And our answer is “no”.
‘As manufacturers of lenses and dispensing tools and instruments, we strive to make our customers’ businesses more successful, enabling them to tap into the potential of digitalisation. Zeiss offers a wide variety of products, services, apps, devices, marketing tools and store shop concepts – all of which support customers in the development of their business. But we do not sell, nor will we sell, directly to consumers.
‘To allow consumers to experience individualised and optimal vision, it not only takes precision lenses and quality frames, it also takes a professional service by eye care professionals: in refraction, centration, consumer consultation, shopping experience and dispensing.
‘Does digitalisation change the vision care industry? Yes. Are we prepared to find reliable and innovative answers on all the challenges which come with digitalisation? Yes. But we continue to serve our customers as partners – we are not their competitors.’
According to Peter Smith, regional vice-president of Essilor UK & Ireland, the company’s involvement is at such an early stage, it is hard to predict how traditional independent opticians on the high street will be affected.
‘Even we don’t fully understand the 1.5% of people that buy glasses online, but we are learning some key facts about them, such as the frequency of their purchasing. But before Essilor acquired Vision Direct and Myoptique, that market estimation of Rx glasses wasn’t even a major part of an optician’s business.
‘I talk to several independents every week who say they don’t get 25 to 30-year-olds coming into our practice anymore. So if you think about it from that perspective, not much has changed following the company’s acquisitions.’
Negative feedback was also received following Optician’s report into the availability of children’s spectacles on the UK versions of retail sites owned by Essilor.
‘When that was brought to our attention, we immediately made the changes to take the product off sale temporarily,’ said Smith.
‘Eyebuydirect.co.uk was a copy of the American .com site and some of the children’s inventory was carried over by mistake during a website upgrade by our international teams,’ Nuesser added. ‘We are working within the laws of local legislation. If someone from the UK decides to buy a pair of glasses on a US .com site, that purchase will be governed by laws within the US.’
This case summarises Essilor’s digital dilemma rather well. To the letter of the law, it has not contravened UK legislation on supervised dispensing. However, some would argue that such an act flies in the face of the values of the profession. The company has recognised that open channels of communication with its partners are essential if it is to continue to grow in the digital age, without shrinking its core business.